Bank of England Governor Andrew Bailey said on Wednesday it was possible the central bank had already come to the end of its rate-rising cycle, leading financial markets question whether a rate rise this month is as clear-cut as they thought.
Before Bailey spoke, markets had fully priced in a quarter point rise, and saw a small change of an increase to 4.5%.
His words showed that the bank's rate-setting committee "is placing more emphasis on the substantial tightening already delivered and would like to call time on its hiking cycle as soon as it feasibly can," said Samuel Tombs, chief UK economist at Pantheon Macroeconomics.Bailey said the economy had developed largely as expected since the BoE last raised rates on Feb. 2.
"If we do too little with interest rates now, we will only have to do more later on. The experience of the 1970s taught us that important lesson," he said. But two MPC members - Swati Dhingra and Silvana Tenreyro - voted in February to pause the rate hikes.
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